“Challenges to the competitiveness of U.S. advanced manufacturing have the potential to undermine the nation’s ability to create jobs, invent new industries and protect itself from security threats in the 21st century,” the White House said.
Ohio’s manufacturing sector produces a state-estimated $73.5 billion in goods annually despite a decade that’s seen 3,500 factory plant closures and the loss of $7.8 billion in annual manufacturing payroll. Ohio’s largest manufacturing sectors include aerospace, autos and machinery.
A White House outline envisions a network of 15 “Institutes for Manufacturing Innovation” around the nation, serving as hubs helping manufacturers and encouraging domestic investment. The proposal is in an early phase, said National Institute of Standards and Technology spokeswoman Jennifer Huergo. It also includes the Departments of Defense, Energy and the National Science Foundation.
Joe Tuss, deputy Montgomery County administrator who focuses on development, said the region is a prime location with defense, materials and advanced manufacturing tech. “If they are serious about this, they need to place the facilities where they know how to manufacture,” he said.
It’s a sentiment echoed by Rep. Mike Turner, R-Centerville.
“Manufacturing helped build this country and Dayton. We would be a natural fit as an area to focus on ramping up manufacturing’s role in our economy,” Turner said. “We have a skilled work force and the infrastructure to make this possible.
“Any effort to boost manufacturing must also focus on the issue of unfair trade practices with countries like China,” Turner added. “Our manufacturers have the ability to outperform the competition if they are given a level playing field to compete on.”
Ohio Gov. John Kasich’s spokesman Rob Nichols — noting 62,000 new jobs in Ohio since January 2011 — called the plan “an interesting concept,” but, he said, “we can’t sit and wait for Washington to fix our economy. We have to chart our own course.”
The situation is so severe, however, that the proposal doesn’t go far enough and must include strong trade reform, said Robert E. Scott, an economist with the Economic Policy Institute, a nonpartisan, liberal-leaning think tank.
“This is typical small change from Obama,” Scott said. “A billion won’t solve our manufacturing problems, but it’s a nice start.” Denmark, for example, spends from 4 to 5 percent of gross domestic product on retraining, job creation incentives and a raft of programs, Scott said.
Congress must approve the proposal. Then, engineering schools would partner with industries to submit proposals for institute locations, Huergo said. A pilot institute, however, needs no Congressional approval and will be funded from $45 million from the Departments of Defense, Energy, and Commerce and the National Science Foundation.
Reports released earlier this year show trends that threaten the nation’s economic recovery and require national policy initiatives.
• The National Science and Technology Council, an arm of the White House Science Office, says the U.S. has lost or is close to losing vital defense and national security technology. American companies are becoming unable to create important inventions. This has led to a high-tech goods deficits.
• The bipartisan Information Technology & Innovation Foundation, with board members split between top Republican and Democrat leaders, said that in 10 years China accumulated $3.2 trillion worth of foreign exchange reserves, the world’s largest account balance, because China practices “economic mercantilism on an unprecedented scale,” seeking to achieve absolute advantage in all industries, especially advanced technology products and services.
• ITIF followed up with another report saying the erosion of American manufacturing in the last decade has been “far more severe than commonly recognized,” with sharp declines in employment and output.
• A report from the U.S. Business and Industry Council, an association of smaller and family-owned manufacturers, says foreign companies that make high-tech and high-value goods are capturing much more of the U.S. consumer market than domestic companies. That includes machine tools, a specialty of local industry here.
Meanwhile, the U.S. Defense Production Act Committee, the White House said, found that vital government needs can’t be met by “secure and reliable domestic production.” Key technologies that could slip abroad to create national security weaknesses are aircraft landing gear; railcar components; large rotor disks for turbines; rocket engine parts; missile launch systems; unmanned aerial and ground vehicles; nuclear power components; aircraft fuselages; orbital vehicles; network routing and switching; optical data transport; advanced power electronics; low cost composites; and transmission conductors.
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